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You're missing the point. When there isn't a market for $AAPL shares at $100, but the government steps in to offer $100 to prop up the price of $AAPL stock, th

You're missing the point. When there isn't a market for $AAPL shares at $100, but the government steps in to offer $100 to prop up the price of $AAPL stock, there is a problem. That is the issue with housing prices, stocks, bonds, debt, and everything else on the world stage. This central bank interference destroys price discovery and disrupts prices everywhere, including Palo Alto, even if they aren't directing bidding on homes there.

lisper 10y ago
That, and also no one needs AAPL stock in order to live, but everyone needs housing. So the price distortions in housing affect society more severely than price distortions in AAPL stock.
- sangnoir 10y ago
  > That, and also no one needs AAPL stock in order to live, but everyone needs housing If housing should be protected from 'distortions', please explain how foreclosures help? I'm not being snide - my economics knowledge is basic, kindly explain it like you would to a high-school graduate.
  - lisper 10y ago
    People generally don't have enough capital to pay cash for a house so they need to borrow some of the money. Such loans are typically secured by the value of the house. If the borrower doesn't repay the loan the lender needs to be able to liquidate the asset to make themselves whole, hence foreclosure. If this were not done, mortgages would be much more expensive because they would be much risker investments.
    - sangnoir 10y ago
      > If this were not done, mortgages would be much more expensive because they would be much risker investments. So foreclosures protect mortgages, rather than housing directly, right? My take on ancestor was than housing was very important so "price distortions" need special intervention to protect housing as a societal need. I'm probably overthinking it.
      - lisper 10y ago
        > So foreclosures protect mortgages, rather than housing directly, right? Yes. But making credit more easily available makes housing more accessible.

lisper 10y ago

That, and also no one needs AAPL stock in order to live, but everyone needs housing. So the price distortions in housing affect society more severely than price distortions in AAPL stock.

sangnoir 10y ago
> That, and also no one needs AAPL stock in order to live, but everyone needs housing If housing should be protected from 'distortions', please explain how foreclosures help? I'm not being snide - my economics knowledge is basic, kindly explain it like you would to a high-school graduate.
- lisper 10y ago
  People generally don't have enough capital to pay cash for a house so they need to borrow some of the money. Such loans are typically secured by the value of the house. If the borrower doesn't repay the loan the lender needs to be able to liquidate the asset to make themselves whole, hence foreclosure. If this were not done, mortgages would be much more expensive because they would be much risker investments.
  - sangnoir 10y ago
    > If this were not done, mortgages would be much more expensive because they would be much risker investments. So foreclosures protect mortgages, rather than housing directly, right? My take on ancestor was than housing was very important so "price distortions" need special intervention to protect housing as a societal need. I'm probably overthinking it.
    - lisper 10y ago
      > So foreclosures protect mortgages, rather than housing directly, right? Yes. But making credit more easily available makes housing more accessible.